Internet billing method

ABSTRACT

Equipment of a provider performs operations including facilitating establishment of first communications between the equipment of the provider and equipment of a purchasing customer to establish a billing arrangement, facilitating establishment of second communications with equipment of a selling vendor to establish a remitting arrangement, enabling the equipment of the purchasing customer to communicate with the equipment of the selling vendor by way of the equipment of the provider, obtaining transactional information relating to a purchase transaction initiated by the equipment purchasing customer, where the purchase transaction results in a billing account of the purchasing customer being charged a first fee, and initiating a remittance of a second fee with the equipment of the selling vendor Additional embodiments are disclosed.

PRIOR APPLICATIONS

This application is a continuation of U.S. patent application Ser. No.13/098,525, which was filed May 2, 2011, which is a continuation of U.S.patent application Ser. No. 12/786,431, which was filed on May 25, 2010,now U.S. Pat. No. 7,941,375, which is a division of U.S. patentapplication Ser. No. 11/928,793, which was filed on Oct. 30, 2007, whichis a continuation of U.S. patent application Ser. No. 11/397,204, whichwas filed on Apr. 4, 2006, which is a continuation of U.S. patentapplication Ser. No. 10/238,762, which was filed Sep. 10, 2002, which isa continuation of U.S. patent application Ser. No. 09/975,839 now U.S.Pat. No. 6,976,008, which was filed Oct. 11, 2001, which is acontinuation of U.S. patent application Ser. No. 09/568,925 now U.S.Pat. No. 6,351,739, which was filed May 11, 2000, which is acontinuation of U.S. patent application Ser. No. 09/057,230 now U.S.Pat. No. 6,188,994, which was filed Apr. 8, 1998, which is acontinuation of U.S. patent application Ser. No. 08/499,535 now U.S.Pat. No. 5,794,221, which was filed Jul. 7, 1995. The contents of eachof the foregoing U.S. patent applications and issued patents are herebyincorporated by reference into this application as if set forth hereinin full.

BACKGROUND OF THE INVENTION

The present invention relates to a method of billing for commercialtransactions over the Internet.

The Internet is a vast worldwide interconnection of computers andcomputer networks. The Internet does not consist of any specifichardware or group of connected computers, rather it consists of thoseelements that happen to be interconnected at any particular time. TheInternet has certain protocols or rules regarding signal transmissionand anyone with the proper hardware and software can be part of thisinterconnection.

At present, the technical and financial requirements for connectingdirectly to the Internet are beyond the resources of most individualsand thus new businesses known as Internet access providers haveproliferated. These providers invest in the equipment needed to provideaccess to the Internet for subscribers who pay the providers a fee forthe access. Providers include companies whose only business is to offerconnection to the Internet, as well as on-line services such asCompuserve, American On-Line, and Prodigy. In addition, telephonecompanies and cable television companies have announced plans to provideInternet access. A party desiring to connect to the Internet by means ofa provider typically connects via a modem over a telephone network tothe provider's equipment which then connects the party, through theprovider's equipment, to the Internet.

Although the origin of the Internet was for military use, today theprimary users of the Internet are civilian. There is great activity atpresent attempting to utilize the Internet as a channel of commerce.

Many vendors advertise their products and services over the Internet andsolicit orders from Internet users for these wares. While the preferredmode of payment is by credit card, there is great reluctance to transmitcredit card account information over the Internet because of lack ofsecurity. Moreover, in situations wherein the transaction amount issmall—from pennies to a few dollars—it is not economically feasible touse a credit card transaction. There is a need to be able to ensure thatcommercial transactions over the Internet are at least as secure asconventional transactions over the telephone, through the mails, andwith on-line services where credit cards and/or billing accounts areused for purchases. Similarly, there is a need to be able to handle onthe Internet a large number of small-sized transactions, similar to whatis done by telephone companies for conventional telephone service.

The lack of security and the lack of a means to bill for smalltransactions are the biggest obstacles to commercial use of theInternet.

SUMMARY OF THE INVENTION

The main object of the present invention is to create a new businessopportunity for telephone companies, cable television companies,existing Internet access providers, and companies offering financialservices by creating a way for them to offer to their subscribers amethod of securely buying and selling goods and services of any valueover the Internet.

Another object of the present invention is an Internet billing methodwhich is cost effective for transactions having transaction amountsranging from pennies to a few dollars.

Still another object of the present invention is to provide a securemethod of billing commercial transactions over the Internet.

A further object of the present invention is an Internet billing methodwhich is simple to use from both the customer's point of view and thatof vendors on the Internet.

Yet another object of the present invention is a billing method whichcan be used by a large number of existing Internet users withoutrequiring major changes in how the users customarily behave and conductcommercial transactions.

These and other objects and advantages of the present invention areachieved by an Internet billing method in accordance with the presentinvention. A provider establishes an agreement with a customer, and asecond agreement with a vendor, wherein the provider agrees with thecustomer and the vendor to bill for products and services purchased overthe Internet by the customer from the vendor. Associated with thecustomer agreement are one or more billing accounts to which purchasesmay be charged. Associated with the vendor agreement are one or moremethods of remitting funds to the vendor. The provider creates access tothe Internet for the customer through the provider's equipment. When thecustomer orders a product or service over the Internet from the vendor,the provider obtains transactional information transmitted between thecustomer and the vendor including a transaction amount relating to theordered product or service and the provider then bills the transactionamount to a customer billing account and remits a portion of thetransaction amount to the vendor.

Which accounts are used may be specified in the agreements made betweenthe provider and the customer and between the provider and the vendor,or may be specified in the transactional information. If specified inthe transactional information, the selection of account can be made byreferencing the type of account (e.g., “VISA”, “phone bill”), or theposition of that account on a predetermined list (e.g., “the 3rdaccount”), and does not require that any actual account numbers betransmitted.

By the use of this method, there is no need for the customer to transmitover the Internet any information containing any of the customer'sbilling account numbers thereby maintaining the security of thatinformation.

The present invention, in a preferred embodiment, is a method ofproviding merchants with the ability to offer their customers securetransactions for the purchase of goods and services of any value overthe Internet, without the need for the customer to transmit any creditcard or other account numbers over the Internet, without the need forthe customer to sign up with any additional provider of services, andwithout the need to change the manner in which most customers currentlyuse the Internet.

In accordance with the present invention, a customer desiring topurchase goods and services over the Internet has prearranged access tothe Internet through the services of an Internet access provider. Suchproviders can be, for example, companies whose only business is to offerconnection to the Internet, companies which offer on-line computerservices, one of which is connection to the Internet, cable televisioncompanies, or telephone companies. In arranging for access with such aprovider, the customer has agreed with the provider on a method ofpayment which is, for example, by billing, or charge to a credit card,or charge to an account of the user which could be an account specificto the Internet or could be a more general account, such as an on-linecomputer services account, a cable television account, a telephoneaccount, or a bank account.

Once the prearrangements have been completed, using the provider'sservice to connect to the Internet typically involves calling atelephone number of the provider and being automatically connectedthrough the provider's equipment to the Internet.

Once connected to the Internet, the customer can browse around until anitem is located that the customer wishes to purchase, at which time thecustomer will follow the instructions created by the vendor, exchangetransactional information, and ultimately agree to purchase something bytaking an appropriate action. In the course of making the purchase, themeans of delivery of the goods or service will be established. Dependingon the type of goods, delivery can be made, for example, by mail (e.g.,in the case of a purchase of a book), by courier service (e.g., in thecase of a purchase of flowers), or by electronic transmission over theInternet (e.g., in the case of delivery of an electronic newsletter orpiece of software). The remaining element of the purchase transaction isthe manner in which the customer pays the vendor.

In accordance with the present invention, the provider has madearrangements with vendors who wish to sell goods and services over theInternet to the customers of the provider. The provider agrees to do thebilling associated with such sales for the vendors, and as part of theagreement, the provider and the vendor have agreed on the manner inwhich the provider will remit funds to the vendor. Examples of paymentinclude payment by check, credit to the vendor's credit card merchantaccount, or credit to another account of the vendor's, such as thevendor's cable television account, telephone account, or bank account.The account of the vendor to be credited need not be with the provider.The arrangements that are made will depend on the vendor's desires andthe capabilities of the provider. For example, if the vendor anticipatesmany small transactions and the provider is a telephone company, theycan agree that the provider will credit the vendor's existing telephoneaccount for amounts under some nominal amount and credit the vendor'scredit card merchant account for larger amounts. If the vendoranticipates large transactions, then they may agree that the providerwill pay by check or direct credit to the vendor's bank account.

In a typical transaction in accordance with the present invention, fromthe customer's point of view all use of the Internet appears to beconventional. Depending upon the prearrangements made between theprovider and the customer and between the provider and the vendor, thecustomer can charge a purchase, for example, to a credit card, to acable television account, to a telephone account or to a bank account.The account of the customer to be billed need not be with the provider.For example, the customer may be using one telephone company as anaccess provider and a second telephone company as a telephone serviceprovider and the account to be billed is that with the second telephonecompany. The customer specifies which account is to be billed by anindication to the provider, but neither the customer nor the vendor hasto transmit any account numbers over the Internet, because it is theprovider, not the vendor, who submits the charge to the credit cardcompany, the cable television company, the telephone company, or toanother account of the customer, or who debits the bank account of thecustomer, and the provider already has been given, during the course ofmaking prearrangements with the customer and the vendor, the appropriateaccount numbers of both the customer and the vendor. The provider sendsthis information to the appropriate party, and may do so by the samesecure means customarily used for similar transactions not made over theInternet.

From the vendor's point of view, the transaction is as secure as atransaction made over the telephone with a credit card. If the vendorwishes, the vendor may verify with the provider that the addresssupplied by the customer for shipment of the goods has been authorizedby the customer in the same manner in which such verification would bemade for the same transaction made over the telephone with a creditcard. In addition, because such a verification does not require thetransmission of any account numbers of the customer, the verificationcan be done over the Internet as part of the transaction transmissionitself if the provider and the vendor have prearranged to do so.

From the provider's point of view, the provider is made aware that thecustomer has authorized the charge by monitoring the data being sentover the Internet through the provider's equipment between the customerand the vendor. This can be done, for example, by specifying a specificcode which, when sent between the customer and the vendor, indicates tothe provider that a transaction has been completed. When the customerhas made a purchase, the provider charges the transaction amount to theagreed account of the customer and remits the agreed portion of thatamount to the vendor, keeping the differential as the provider's chargefor making the service available.

These and other features and advantages of the present invention willbecome apparent from the following detailed description of the inventionwith reference to the attached drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a block diagram of a system for carrying out the billingmethod according to the present invention;

FIG. 2 is a flow chart of one embodiment of the method according to thepresent invention; and

FIG. 3 is a flow chart of another embodiment of the method according tothe present invention.

DETAILED DESCRIPTION OF THE INVENTION

Referring to FIG. 1, a system for carrying out the method of the presentinvention is shown. In that system, the Internet is shown schematicallyas network 1 to which providers 2, 9, vendors 5.1-5.n, 6.1-6.n and8.1-8.n, and customers 4.1-4.n and 10.1-10.n (where n is an integer toindicate a range from one to many) are connected in different ways.

Provider 2 is connected to access network 3 and the Internet 1 andprovides access to the Internet 1 for customers 4.1-4.n and vendors6.1-6.n connected to access network 3. Access network 3 can be atelephone network, a cable television network, an on-line servicesnetwork such as Compuserve, American On-Line, or Prodigy, or a privateInternet access network. Similarly, provider 9 is connected to accessnetwork 7 and the Internet 1 and provides access to the Internet 1 forcustomers 10.1-10.n and vendors 8.1-8.n. Vendors 5.1-5.n access theInternet directly by their own equipment.

In accordance with the method shown in the flow chart of FIG. 2, forexample, in step 11 provider 2 establishes agreements with vendors5.1-5.n who are connected directly to the Internet, with vendors 6.1-6.nwho access the Internet via access network 3 and provider 2, and withvendors 8.1-8.n who are connected to the Internet 1 via access network 7and provider 9, to bill customers 4.1-4.n for goods and servicespurchased by them over the Internet from vendors 5.1-5.n, 6.1-6.n and8.1-8.n. Provider 2 also agrees to remit a portion of the collectedmoney back to the vendors. Provider 2 also establishes an agreement witheach of customers 4.1-4.n. These agreements provide that the providerwill bill the customer for goods and services purchased by them over theInternet. The billing will be done to billing accounts established inconnection with the agreements. The billing accounts can be, forexample, credit card accounts, telephone accounts, cable televisionaccounts, on-line services accounts, or bank accounts. The accounts neednot be with the provider if the provider has a billing agreement inplace with the party with whom the account was established.

As part of the services of the provider to customers 4.1-4.n, thecustomer is connected to the Internet 1 in step 12 at a desired time,typically by making contact via modem. Once connected to the Internet,the customer can interface with anyone of vendors 5.1-5.n, 6.1-6.n and8.1-8.n in order to find out about products or services offered by thosevendors.

When one of customers 4.1-4.n makes the decision to order a product orservice from one of vendors 5.1-5.n, 6.1-6.n and 8.1-8.n, in step 13 anexchange of transactional information occurs between the customer andthe vendor. This exchange may include identifying information relatingto the customer, such as the customer's Internet address, informationrelating to the products or services to be purchased, including thetransaction amount, the manner and time of delivery, and a referencenumber to identify the order. The vendor or the customer also canproduce a verification code signifying that a transaction has beencompleted which can be received by provider 2.

In step 14, the transactional information is obtained by provider 2. Thecommunication can be a separate transmission by the vendor or thecustomer to provider 2, or provider 2 can extract the information fromthe exchange of information taking place between the customer and thevendor through equipment of provider 2. Provider 2 can then sendverifying information to one or both of the customer and vendor toindicate that the transaction has been approved, if approval of a thirdparty, such as credit card company, is required. Most importantly, theentire transaction takes place without the need of communicating thecustomer's credit card or other account number over the Internet 1.

The product or service is delivered to the customer in step 15 and theappropriate customer account is billed by provider 2 in step 16.Provider 2 then remits the agreed payment in the appropriate manner tothe vendor in step 17, keeping the differential as a service charge forthe services rendered by provider 2. Steps 15, 16 and 17 may beperformed in any order.

As can be seen from FIG. 1, the method according to the presentinvention can be carried out in many ways. For example, referring toFIG. 3, vendor 5.1 in step 21 can establish remitting agreements withprovider 2 and provider 9 to remit to vendor 5.1 a portion of atransaction amount billed to the billing account of anyone of customers4.1-4.n and 10.1-10.n.

Similarly, each of vendors 6.1-6.n can establish a remitting agreementwith provider 9 for transactions carried out over the Internet betweeneach of vendors 6.1-6.n and customers 10.1-10.n.

A customer connects to the Internet in step 22. The customer exchangestransactional information with the vendor in step 23 and the vendordelivers a product or service to the customer in step 25, either beforeor after the vendor receives remittances from the provider in step 27.

In accordance with another feature of the present invention, prior tothe billing of the transaction amount to the account of the customer,and after obtaining the transactional information, the provider canobtain approval from a third party to bill the transaction amount to thebilling account. This is particularly true in the case where the billingaccount is a credit card account or a bank account. In that instance,approval must be obtained from a third party, i.e., the bank issuing thecredit card or with whom the bank account was established. Where theaccount is with the provider, approval would be obtained from theprovider itself. In a preferred embodiment of the present invention, theapproval can be obtained over the Internet and most preferably duringthe communication between the customer and the vendor.

In accordance with a further feature of the present invention, thecustomer can specify a particular billing account, for example, a creditcard account, a bank account, a telephone number account, a cabletelevision account or an on-line services account at the time that thebilling agreement is established with the provider. The specificationcan provide that one account will be used for certain transactions, anda different account for other transactions, for example, a telephoneaccount for transactions less than $5.00, and a bank account fortransactions of at least $5.00. Thereafter, whenever the transactionamount is to be billed, it will be billed to that specified billingaccount. Alternatively, the customer can specify a plurality of billingaccounts, for example, an AMEX account, a VISA account, a MasterCardaccount at the time that the billing agreement is established. When thetransactional information is communicated, it will include anidentification of which of those plurality of billing accounts thecustomer wants billed, without, however, specifying the account numberof the account. Thus the customer can merely indicate the account by the“brand” name AMEX, VISA or MasterCard or the customer can identify it asthe first account, second account or third account on a list previouslyestablished with the provider.

As noted above, the billing account is not necessarily with theprovider, that is, it can be with a third party such as a bank issuing acredit card, or a bank at which the customer has a bank account.Alternatively, the provider can be a first telephone company, but thebilling account can be with a second telephone company and charged bythe first telephone company to the telephone number account of thecustomer with the second telephone company, as is customarily done inconnection with conventional telecommunications services.

In accordance with the invention, the remitting can be by means ofsending money or by crediting a vendor account such as a credit cardmerchant account, a bank account, a telephone number account, a cabletelevision account or an on-line services account.

In a preferred embodiment of the present invention, the step ofestablishing the remitting account comprises specifying a particularvendor account to which the portion of the transaction amount will beremitted. The specification can provide that one account will be usedfor certain transactions, and a different account for othertransactions, for example, a telephone account for transactions lessthan $5.00, and a bank account for transactions of at least $5.00. In analternative embodiment of the present invention, the step ofestablishing the remitting agreement comprises the vendor specifying aplurality of vendor accounts to which a portion of the transactionaccount can be remitted. Thus when the transactional information iscommunicated, the vendor can identify which one of the plurality ofvendor accounts the amount is to be remitted to without, however,specifying the specific account number.

The vendor account can be an account with the provider or an accountwith a third party such as a credit card merchant account, or bankaccount, with a bank, or a cable television account with a cabletelevision company.

It is understood that the embodiments described hereinabove are merelyillustrative and are not intended to limit the scope of the invention.It is realized that various changes, alterations, rearrangements andmodifications can be made by those skilled in the art withoutsubstantially departing from the spirit and scope of the presentinvention.

1. A method, comprising: utilizing equipment of a provider forfacilitating establishment of communications between the equipment ofthe provider and equipment of a purchasing customer to establish abilling arrangement; utilizing the equipment of the provider forfacilitating establishment of communications between the equipment ofthe provider and equipment of a selling vendor to establish a remittingarrangement; utilizing the equipment of the provider for facilitatingestablishment of communications between the equipment of the providerand the equipment of the purchasing customer for performing a commercialtransaction, wherein the equipment of the provider enables the equipmentof the purchasing customer to communicate with the equipment of theselling vendor; obtaining transactional information relating to apurchase transaction performed by the equipment purchasing customer,wherein the purchase transaction corresponds to a product or servicesold by way of the equipment of the selling vendor; initiating betweenthe provider and the selling vendor a remittance of a fee determinedfrom the transactional information and the remitting arrangement.
 2. Themethod of claim 1, wherein the selling vendor delivers to the purchasingcustomer purchased goods by mail, courier service, or by electronictransmission, wherein the obtaining of the transactional information isperformed by the equipment of the provider, and wherein the initiatingof the remittance is performed by the equipment of the provider.
 3. Themethod of claim 1, comprising charging a first amount to a billingaccount associated with the purchasing customer in accordance with thebilling arrangement, wherein the billing account is managed by theprovider or a third party unaffiliated with the provider.
 4. The methodof claim 1, wherein the transactional information comprises one ofidentifying information relating to the purchasing customer, an amountof the purchase transaction, or a reference to identify the purchasetransaction.
 5. The method of claim 1, comprising obtaining thetransactional information from one of the equipment of the purchasingcustomer, the equipment of the selling vendor, the equipment of theprovider, or equipment of a third party which is neither the equipmentof the purchasing customer, the equipment of the selling vendor, or theequipment of the provider.
 6. The method of claim 1, comprisingreceiving an authorization from one of the equipment of the purchasingcustomer, the equipment of the selling vendor, or equipment of a thirdparty which is neither the equipment of the purchasing customer, theequipment of the selling vendor, or the equipment of the provider tocharge a billing account of the purchasing customer a first amount. 7.The method of claim 1, wherein the equipment of the purchasing customerfacilitates establishment of communications with the equipment of theprovider by way of a communications network operated by a third partyunaffiliated with the provider, and wherein it is the equipment of theprovider, not the communications network operated by the unaffiliatedthird party that enables the equipment of the purchasing customer tocommunicate with the equipment of the selling vendor.
 8. The method ofclaim 1, wherein the equipment of the provider and the equipment of thepurchasing customer are communicatively coupled over an Internetconnection for establishing the billing arrangement.
 9. The method ofclaim 1, wherein the equipment of the provider and the equipment of theselling vendor are communicatively coupled over an Internet connectionfor establishing the remitting arrangement.
 10. The method of claim 1,comprising charging a billing account associated with the purchasingcustomer a first amount by way of equipment of the provider or equipmentof a third party other than the provider.
 11. The method of claim 1,comprising remitting to an account associated with the selling vendorthe fee by way of equipment of the provider, wherein the accountassociated with the selling vendor belongs to the selling vendor, theprovider, or a third party other than the selling vendor and theprovider.
 12. An apparatus, comprising: a storage medium storingcomputer instructions; and a computing resource coupled to the storagemedium, wherein execution of the computer instructions by the computingresources causes the computing resource to perform operationscomprising: facilitating establishment of a first communication sessionwith equipment of a purchasing customer to establish a billingarrangement; facilitating establishment of a second communicationsession with equipment of a selling vendor to establish a remittingarrangement; facilitating establishment of communications with theequipment of the purchasing customer over a first communications link;enabling the equipment of the purchasing customer to communicate withthe equipment of the selling vendor over a second communications link;obtaining transactional information relating to a purchase transactioninitiated by the equipment of the purchasing customer, wherein thepurchase transaction corresponds to a product or service sold by way ofthe equipment of the selling vendor; and initiating with the equipmentof the selling vendor a remittance of a fee determined in accordancewith the remitting arrangement.
 13. The apparatus of claim 12, wherein abilling account associated with the purchasing customer to which atransaction fee is charged responsive to the purchase transaction ismanaged by a provider of the apparatus or a third party other than theprovider.
 14. The apparatus of claim 12, wherein executing the computerinstructions causes the computing resource to perform operationscomprising receiving the remittance of the fee from an accountassociated with the selling vendor, wherein the account associated withthe selling vendor belongs to the selling vendor, a provider of theapparatus, or a third party other than the selling vendor and theprovider.
 15. The apparatus of claim 12, wherein executing the computerinstructions causes the computing resource to perform operationscomprising remitting the fee to an account associated with the sellingvendor, wherein the account associated with the selling vendor belongsto the selling vendor, a provider of the apparatus, or a third partyother than the selling vendor and the provider.
 16. The apparatus ofclaim 12, wherein the fee being remitted corresponds to a portion of thepurchase transaction, and wherein the remittance of the fee is initiatedfrom an account associated with the selling vendor according to theremitting arrangement.
 17. A non-transitory computer-readable storagemedium comprising computer instructions, which when executed byequipment of a provider perform operations comprising: utilizingequipment of a provider for facilitating establishment of firstcommunications between the equipment of the provider and equipment of apurchasing customer to establish a billing arrangement; utilizing theequipment of the provider for facilitating establishment of secondcommunications with equipment of a selling vendor to establish aremitting arrangement; enabling the equipment of the purchasing customerto communicate with the equipment of the selling vendor by way of theequipment of the provider; obtaining transactional information relatingto a purchase transaction initiated by the equipment purchasingcustomer, wherein the purchase transaction results in a billing accountof the purchasing customer being charged a first fee; and initiating aremittance of a second fee with the equipment of the selling vendor. 18.The storage medium of claim 17, wherein the selling vendor delivers tothe purchasing customer purchased goods by mail, courier service, or byelectronic transmission, wherein the enabling of the equipment of thepurchasing customer is performed by the equipment of the provider,wherein the obtaining of the transactional information is performed bythe equipment of the provider, and wherein the initiating of theremittance is performed by the equipment of the provider, and whereinthe billing account associated with the purchasing customer is chargedthe first fee by the equipment of the provider.
 19. The storage mediumof claim 17, wherein executing the computer instructions causes theequipment of the provider to perform operations comprising remitting thesecond fee to an account associated with the selling vendor, wherein theaccount associated with the selling vendor belongs to the sellingvendor, the provider, or a third party other than the selling vendor andthe provider.
 20. The storage medium of claim 17, wherein executing thecomputer instructions causes the equipment of the provider to performoperations comprising receiving the remittance of the second fee from anaccount associated with the selling vendor, wherein the accountassociated with the selling vendor belongs to the selling vendor, theprovider, or a third party other than the selling vendor and theprovider.